Talk Around Town

So just where are we at after 10 years of the GFC?

It would appear that some commentators are split…one stating we are heading for 8 interest rate increases in the next 2 years, and another stating that there would not be a change in 2017. Both statements made within a week of each other and both by former Reserve Bank board members.

What the RBA did say recently, the ‘normal’ for interest rates as they see it, is around 3.5% – we are currently sitting at 1.5%, so there is obviously ground to be made up to reach 3.5%. However, no time frame has been put around just when and how often we can expect increases.

If the AUD$ goes north of USD$0.80, which appears possible, I would not expect another cut. The only way from here is up, but we may not see the first increase until 2018.

Property price crash predictions have now been replaced by more conservative observations that property prices will not crash but slow to small single digit percentage increases year on year.

The one thing that most experts are agreeing with, is that within business the conditions we are seeing now and for the past 6-8 months have returned to where they were pre-GFC. This level of business confidence is a great sign of things to come.

Couple that with Government infrastructure spending and numerous big and small projects now on the go, especially prevalent in Victoria and NSW…we enter the new Financial Year with renewed vigour and enthusiasm.

(Below, reported on ABC News from NAB report, 12/7/2017)

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